"Hard rolls" at Willie's bakery: 45 cents to 75 cents!

Willie's Super Valu, Morris (B.W. photo)

Is inflation flashing a red light for you yet? The word has more than crept into the headlines. Is there a degree of "media frenzy" here? I mean, there's at least a nugget of truth with the inflation fears now. Does the media latch onto this and sort of sensationalize? 

I'm admitting my age when I share how I remember the inflation of the 1970s. The media conjures that up quite a bit. As a "veteran" of those times, let me tell you that inflation did flash a red light. It became a hot potato political issue, to where the point was reached that someone in an influential position had to reach into his bag of tricks. That "someone" was Paul Volcker. He took the reins at the Federal Reserve. 

"The Fed" has gotten so high-profile in the recent past because it has been indefatigable in putting up guard rails for the stock market. The stock market has seemed like Emerald City with its allure/magic. People have been guided into those magical "401Ks" everywhere, yes with ubiquity. And so the Fed guards the "green arrows" of the stock market in a dogged way. 

The financial news media provides support as if its on-air people are actually wearing cheerleading costumes and doing high-fives. Lordy, "business news" ought to be dull. It was definitely dull in my growing-up and young adult years. The network evening news would have some token boring person do the business update, pretty obligatory. Ah, Irving R. Levine of NBC News. He did fine with his dry assignment. I can at least remember his name. 

Then we plunged into the age of Ron Insana, Joe Kernen et al. Donald Trump sought to go on TV with the latter. Nothing made Trump thump his chest so much as to report the stock market going up. But how legitimate was this phenomenon? And at present we must wonder: has it been rather an illusion, the prosperity I mean, because interest rates have been kept abnormally low for so long? Seems quaint to remember "QE" as this little obligation for applying emergency first aid after the "financial crisis" of 2008. 

"Financial crisis": sounds rather like an act of God. It was totally not an act of God. It was of the making of us flawed mortal folks.

 

Jerome Powell of the Fed

Going to the well

Once the Fed saw it was like a guardian of the economy, feeling its oats as it were, it steadily got more full of itself. It felt ever more empowered. And can you blame those people? Our political leadership wanted one "fix" after another from the Fed. 

Interest rates exist for a reason. For one thing, it makes politicians more responsible with their spending decisions, n'est-ce pas? You may pause to laugh here. 

Actually we may not be in a position to laugh much longer. I mean, some telltale signs are definitely out there. 

Reality check: People have not stopped dining out. I had to circle the DeToy's parking lot more than once at about 10 a.m. today (Saturday), seeking a parking spot. 

I think dining out is therapeutic for people who grew weary with the pandemic-caused restrictions/isolation. I know that's a motivating factor for me. Now, my favorite breakfast at Caribou Coffee (at Willie's) has not gone up in price since the hair-pulling with inflation started. Perhaps that breakfast was over-priced to begin with? Oh, I need to be more positive. You know what? People don't mind paying a hefty price if a meal is really satisfying. 

DeToy's is holding its own. For now. If any more price hikes become necessary there, it will be a test. I strongly hope they pass the test. One cannot predict the future. In fact, it is an absolute truism that you cannot predict how interest rates will behave. But, I think this particular truism applies more in normal times. In normal times we expect a certain ebb and flow with the economy. 

 

Is there a home base?

For a while after QE started, we heard how interest rates would "normalize." But then all the bull market cheerleaders, all those folks who try to stuff stocks down your throat - "no-load mutual funds" - began to act like they were offended by the term: "normalize interest rates." Hey, interest rates can be kept at zero forever because, well, we're really in Emerald City! So "pay no attention to the man behind the curtain." That be the Fed chair, and under current circumstances it seems not to matter who that is. 

And you know what really gives me a belly laugh? When the Fed puts out a "statement" and then all the analysts, gathering like moths to a light, analyze it word by word. There is a term called "Fedspeak." So it's as if the Federal Reserve people speak in a foreign or coded language. That's really not exaggeration. 

But what really makes me laugh now, is how each literal word of a Fed official's statement gets the analysts scrambling. The analysts are perhaps vain in this venture, seeking to impress us? Jim Morrison in his wisdom told me those people "want you to buy their newsletters." I suppose it's online subscriptions now.

But what this all shows, is that the economy is too dependent on the Federal Reserve, as if this entity is going to create real wealth. Real wealth comes when we produce things. If we aren't producing, we should be whistling past the graveyard. 

So, are we on the verge of seeing real unmistakable inflation, to get the "red flag" of a warning? Well, let me just report: this past week I went to our beloved Willie's Super Valu in Morris to get a favorite snack item: a "hard roll" from the bakery. Typically I get two. Now I get one. I was in the habit for a long time of paying 45 cents per roll. If I submitted a $5 bill, I could get four one-dollar bills in change, which I then used to get my lunch at the former senior center - it's where the Meals on Wheels kitchen is now. 

 

Canary in coal mine?

This past week, I found that the price of a hard roll had gone up to 75 cents. To make clear, a hike of 30 cents: 45 to 75 cents. 

I mentioned this in a nice way to a checkout clerk and she, equally nice, pointed out that price hikes were really going on throughout the place. In other words, get ready. You won't need a store clerk advising you of this - a bell will go off for you at some point. 

We heard lots of bells in the 1970s, that's for sure. Oh and we heard disco music. We watched "The Gong Show" on TV and "Smokey and the Bandit" movies. Euell Gibbons was a celebrity and we heard about the decadent "Studio 54" in New York City. And more importantly we dealt with losing a war. We lost the Vietnam War and had to witness the incredible "fall of Saigon" on the evening news. 

My God, you think the departure from Afghanistan was awkward or incompetent? It was NOTHING compared to our exit from Vietnam. 

Euell Gibbons, RIP

That war colored my whole growing-up years. It was fought because of the Cold War with the Soviet Union. Or, was it fought because of the military industrial complex? The latter question is rhetorical. 

Well, good luck with dealing with the rapidly increasing prices. At some point you may not be so infatuated about your 401K. You may not want to listen to all those stock market hucksters. They have had a heyday, a spree, with their selling message for so long. Their luck is going to run out. 

Good luck to you all in dealing with "shrinkflation" too. Just don't become like Euell Gibbons. (You can look that up.)

- Brian Williams - morris mn minnesota - bwilly73@yahoo.com